Government of the Republic of the Philippines v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: The United Lumber and General Workers of the Philippines (ULGWP) obtained a judgment of P10,660,264.09 against Marinduque Mining and Industrial Corporation (Marinduque Mining) and Nonoc Mining and Industrial Corporation. A writ of execution was issued, and respondent Sheriff Juan Gonzaga levied on certain machineries, equipment, vehicles, and materials of Marinduque Mining. Procedural History: The Asset Privatization Trust (APT), representing the Government of the Republic of the Philippines, filed a Notice of Third-Party Claim, asserting ownership over the levied properties by virtue of Proclamation No. 50 and subsequent transfers. APT also filed a petition for injunction with the NLRC, questioning the levy and sale. The NLRC initially enjoined the auction sale and ordered the Labor Arbiter to resolve the third-party claim. During the hearing, APT's counsel admitted that the Deed of Transfer from Nonoc Mining to the Government involved loans, equity, and interest, but not the assets and chattel, as Nonoc Mining had not been foreclosed. ULGWP posted an indemnity bond of P60,000,000.00, which was approved, and the Labor Arbiter lifted the suspension of execution proceedings and denied APT's third-party claim. An alias writ of execution was issued, and the sheriffs conducted an auction sale on October 26, 1992, where Zoilo Andin, Jr. was the highest bidder. APT filed an Omnibus Motion alleging the auction sale was a nullity. The NLRC, in a resolution dated December 18, 1992, affirmed the auction sale, finding the levy complete, the auction conducted, and the third-party claim moot. It also granted a writ of possession to the private respondent. Subsequently, the RTC of Surigao City issued a temporary restraining order enjoining the writ of possession, and the private respondent faced charges of falsification. The Petition: The Government, through APT, filed a special action for certiorari with the Supreme Court, assailing the NLRC's resolution for grave abuse of discretion, arguing that the auction sale was void, that the compromise agreement should have led to the annulment of the levy and sale, and that the NLRC exceeded its jurisdiction in granting a writ of possession to a non-party.
Issue(s)
Whether the NLRC (5th Division) acted with grave abuse of discretion amounting to lack of jurisdiction in not finding that the auction sale conducted by the respondent sheriffs is void. Whether the NLRC (5th Division) acted with grave abuse of discretion amounting to lack of jurisdiction in refusing to annul the levy and sale despite the compromise agreement entered into by the parties. Whether the NLRC (5th Division) acted in excess of jurisdiction when it granted the motion for writ of possession filed by Andin, Jr., who is not a party to the case.
Ruling
The petition is dismissed. The Supreme Court affirmed the resolution of the National Labor Relations Commission (NLRC), finding no grave abuse of discretion. The Court directed the respondent Sheriffs, under the supervision of the NLRC, to turn over the subject chattels to the private respondent, Zoilo Andin, Jr., but with a value not exceeding P60 million. The petitioner may assign a representative to observe compliance, and the NLRC is directed to resolve any valuation disputes.
Ratio Decidendi
On the issue of whether the NLRC (5th Division) acted with grave abuse of discretion amounting to lack of jurisdiction in not finding that the auction sale conducted by the respondent sheriffs is void: The Supreme Court held that the petitioner, APT, failed to substantiate its claims of an excessive levy. APT's valuation of the properties fluctuated significantly from P60 million to P4.5 billion without presenting concrete evidence before the NLRC. The Court noted that APT did not raise the issue of excessive levy in its initial third-party claim and only asserted it much later in the proceedings. Furthermore, the Court gave more weight to the Solicitor General's consistent assertion that the value of the levied properties was P60 million, aligning with APT's initial assessment. The Court also found that the description of the levied chattels was sufficient for prospective bidders to identify them with ordinary diligence, and the claim that the Certificate of Sale failed to mention the third-party claim was not raised before the NLRC. The contention that the sheriffs did not take possession and control of the chattels was dismissed, as the NLRC correctly found that the levy was complete through inventory, notice, and posting, and APT itself had previously acknowledged such proceedings as constituting levy and taking. Finally, the argument that the sale of properties as one whole lot was contrary to law was rejected, as APT failed to prove that a larger sum could have been realized from a sale in parcels, and the Court generally upholds execution sales unless irregularities are prejudicial and not merely technical. On the issue of whether the NLRC (5th Division) acted with grave abuse of discretion amounting to lack of jurisdiction in refusing to annul the levy and sale despite the compromise agreement entered into by the parties: The Supreme Court affirmed the NLRC's ruling that the compromise agreement came too late to quash the consummated execution sale. The sale had already been conducted on October 26, 1992, and a certificate of sale had been issued to the highest bidder. The Court also highlighted that the compromise agreement did not carry the specific individual consent of each laborer affiliated with the ULGWP, who were the real beneficiaries of the judgment. Citing Kaisahan ng mga Manggagawa sa La Campana v. Sarmiento, the Court reiterated that money claims due to laborers cannot be settled by a union or counsel without the explicit consent of each laborer. The Court viewed APT's actions, including the compromise agreement, as dilatory maneuvers to frustrate the levy and sale. On the issue of whether the NLRC (5th Division) acted in excess of jurisdiction when it granted the motion for writ of possession filed by Andin, Jr., who is not a party to the case: The Supreme Court found no excess of jurisdiction. Private respondent Andin, Jr., as the highest bidder and recipient of the certificate of sale, had a vested right in the auctioned properties. Denying him the right to seek possession would constitute a deprivation of due process. The Court acknowledged that while the physical possession was not delivered, juridical or symbolical possession was transferred upon the execution of the Certificate of Sale. The Court, applying principles of equity, limited the value of the properties to be turned over to Andin, Jr. to P60 million, considering the substantial cost of dismantling and shipping the scrap properties and the indemnity bond posted by ULGWP. The NLRC was directed to resolve any valuation disputes.
Main Doctrine
The Supreme Court affirmed the NLRC's resolution upholding the auction sale of Marinduque Mining and Industrial Corporation's properties, finding no grave abuse of discretion. The Court emphasized that a third-party claim must be substantiated with evidence, and allegations of excessive levy require proof, not mere assertions. Furthermore, a compromise agreement, if entered into too late in the proceedings, cannot automatically quash a consummated execution sale, especially when it lacks the consent of the actual beneficiaries.